David Morgan Buy Precious Metals Now

ProbableApril 19, 20160 Comments

Still, it’s worth noting the failure of other widely cited factors to
account for gold’s recent short-term weakness. Take inflation, since
gold is widely considered to be an inflation hedge. In contrast to the
Consumer Price Index’s 2.1% increase in 2017, its rate of increase over
the last 12 months is 2.9%. Other things equal, therefore, one would
have thought that gold would have increased this year — not fallen
significantly.

Or take geopolitical risks, since gold is widely thought to be a hedge against geopolitical uncertainty. At least according to an index of such uncertainty
that has been constructed by two economists at the Federal Reserve,
however, geopolitical risk today is slightly higher than it was last
year. So, to the extent gold hedges such uncertainty, you’d expect gold
to be higher today than earlier this year.

The bottom line: Contrarians won’t trigger a buy signal until the gold timers on balance become much more discouraged.